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ONDC’s strategy to bring small Indian merchants onboard

ONDC is a digital network backed by the government of India. It accommodates small merchants and mom-and-pop stores in India by giving them access to a wider customer base. ONDC is seeking to create a strong network for digital platforms similar to the Unified Payment Interface (UPI).

Last week logistics unicorn ‘Delhivery’ announced that major digital commerce platforms such as Amazon, Flipkart, Kotak Mahindra, Shiprocket, Ekart and Snapdeal may go live on ONDC (open network for digital commerce) in the near future. DPIIT secretary Anurag Jain said “we have initiated conversations with all of them and initial indications are that they will join. The conversations with the top four are in various stages, and by and large, they seem interested.” He further added that the e-commerce industry has captured about 5-7% of the startup ecosystem in India.

For efficient settlements on their network, ONDC has prepared a structured groundwork to back settlements in order to make sure that the payments are properly distributed to the entities in accordance with the digital contracts and the service agreements which are within a specified frame of time. It is estimated to go live by Jan 2023 with several tests conducted by Kotak Mahindra Bank. Simultaneously, the BBPS (Bharat bill pay system) and the collaboration of ONDC are progressing. With over 70 applications already filed in the initial stages of the launch of the programme. CEO of ONDC, T. Koshy said that “we will also focus on reaching out to smaller towns and onboard local kiranas and merchants.” Any kind of incentives or subsidies from the govt to the firms coming on board was denied.

ONDC has initiated new incentive programmes starting last week. T. Koshy said, “Through this one-time incentive programme, the aim is to scale our current network of 700 plus merchants across India in F&B and groceries to more than 20,000 merchants across various categories.” Multiple buyers, sellers and logistics applications had gone live with ITC, EkSecond Technologies, Meesho, Uengage, Grab, Delhivery, Shiprocket and others since the month of September.




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